Pakistan’s oil marketing sector is at risk of forced exits and disorderly consolidation if its ongoing fragmentation is not addressed, according to a new report by Mountain Ventures, a Dubai-based advisory service.
The Pakistan OMCs Review 2025 highlights the dominance of a few large players in the sector, noting that 60% of the market share is held by just three players, 95% by the top ten, and 98.5% by the top twenty. The remaining OMCs struggle with small scale and often rely on discounting to remain competitive, which erodes margins and hampers investment in critical areas such as compliance and infrastructure.
“Consolidation will happen regardless. The only question is whether it occurs early and orderly, or later through financial stress, exits, and market disruption,” the report stated.
The report warns that the sector is showing similar signs of weakness to the US airline industry, which faced collapsed margins, bankruptcies, and forced mergers.
Despite solid volume growth in 2025, with gasoline, gasoil, and hi-octane sales increasing by around 10% YoY, the sector’s financial health is under strain. The report pointed out that regulated pricing, persistent discounting, and rising capital requirements are factors contributing to a tightening outlook. In addition, uncertainty surrounding the Infrastructure Development Cess and sales tax recoverability have heightened the working capital requirements of OMCs.
The report also identified owned storage capacity and retail network quality as key operational constraints on the sector’s growth. As gasoline storage capacity becomes increasingly limited, network optimization is now a priority over simply expanding the number of outlets.
The growing presence of global brands such as Aramco, Gunvor, and Wafi Energy is expected to shift market dynamics. These international companies are likely to raise consumer expectations around service quality, operational standards, and product integrity, particularly with their consistent retail formats and strong branding.
Looking forward, the report emphasized that consolidation, rationalization, and capital discipline would be essential in shaping the future of the sector. The growth trajectory of Pakistan’s oil marketing industry will increasingly depend on factors like scale, financial resilience, and execution capability, rather than just demand growth.
